The fourth annual Intimate with Self-Managed Superannuation report produced by the SMSF Professionals’ Association of Australia, Russell Investments and CoreData off the back of surveys of SMSF trustees and investors, found it is now advisers who are largely driving SMSF establishment rates.
“Financial planners appear to be the most trusted source of advice for setting up an SMSF, as opposed to last year’s top choice of accountants,” the report stated.
Of the survey respondents who were not SMSF trustees, 42 per cent of females and 30.8 per cent of males said they would be more likely to seek out the advice of a financial planner on setting up an SMSF than an accountant (20 per cent and 26.4 per cent respectively).
In addition, the report found that the “use of financial planners as a primary source of advice for trustees has risen, with 51.8 per cent of trustees using an independent financial adviser or aligned financial planner compared to 50 per cent in 2012”.
However, despite “independence” being listed as one of three key attributes SMSF trustees look for in an adviser, the number seeking independents has diminished, with “slightly more” trustees now using an institutionally-aligned adviser (26.7 per cent) than an IFA (25.1 per cent).
This shift in demand for independent advice may, however, simply be a corollary of “recent mergers and acquisitions of IFAs by institutions”, the report suggested.
Non-aligned advisers were found to offer a greater range of SMSF services than the institutionally-aligned sector, including SMSF “establishment, administration and tax advice”.
Reflecting on the findings, SPAA chief executive Andrea Slattery said that regardless of licensing and parent company arrangements, SMSF trustees are looking for advisers who can demonstrate expert knowledge.
“You have to be an expert at what you are doing,” Ms Slattery told journalists yesterday. “If you aren’t expert at what you are doing, this is a market that will expose you.”
The SMSF industry is in a period of transition and after the current exemption for Accountants providing limited advice ends, we will see their approach to the establishment of these structures more ‘balanced’: they will have the skills to consider the investment benefits (if any) for individual clients as well as the potential taxation benefits.
Our FP firm has been involved in almost as many ‘unwinding’ of SMSFs as we have establishment of new ones: having been able to meet the taxation AND retirement planning goals of the particular individuals through retail products – at lower cost and less personal compliance responsibility to the members.
the accounting & financial planning bodies should meet & sort this out. Being both a qualified Accountant & Financial planner for 25 Years i have seen my share of Both bad accountants & fin. Planners. But having these public turf war is pointless I have heard it all Fin planners qualification are joke ie Dip fin Ser is a very low std until the qualification & barriers of entry are raised the view that Fin Planning is product floggers (please note not all planners i have come across are like this). In my own practice the accounting staff have low opinion of the Fin Plan until they actually see what they do. Whats required in my view is education program for both professions
The key message is obviously you must be professional and look after your clients as a highest priority. The are plenty of not so great planners and a plethora of accountants who ‘do smsf’s’ while clearly they are I’ll equipped to do so.
Formulating professional partnerships is the best solution, experts that have scale in their chosen area are appropriate whereby they partner together for the benefit of their mutual clients.
If you really believe you are a professional you should be joining with planners and accountants that are competent to drive out the planners AND accountants that clearly are not.
As per Liam’s comments, turf wars between professionals are patently unprofessional. Think about that!
Accountants are just a tinsy winsy little bit sensitive in the area of SMSF. Having sat in the SMSF space twiddling their thumbs for 20 years producing nice, neat historical documents they are being exposed as deficient in the areas that actually matter, creating and protecting wealth for clients. I’d like a $1 for the amount of SMSFs I’ve come accross with no investment or insurance strategy, non comlying assets, loans to members, the list is long. The fact FPs even have an opportunity in this space is reflective of the past deficiencies. Unless an Accountant is licensed to do so they cannot by Law be operating in this space apart from advice on set up. You have to ask yourself the question. Why is that? The law and the public recognise that despite your protest to the contry, Accountants are neither qualified or have the experience to operate in an area that they have mostly neglected up until a little competitive pressure has applied. You are reaping what you have sowed.
Gee wiz, I concur with Grant 150%. Whenever I bring up the discussion about technical strategies like pensions, death benefits, investment reserves, etc with a financial planner it’s all too hard. A lot of FPs who portray themselves as experts in SMSFs really live in la la land and get exposed time after time. Some do understand and have the technical nouse and skills, but a lot don’t from personal experience over my 30 years in this space.
Grant Cross…get over yourself. What you do can be arranged from the Philippines or India for $3 an hour and with less ego and attitude. Im yet to see someone save for and live in retirement on the value derived from calculation of history. But Im tipping you already know that given the ever so slight hint of a complex, inferior or otherwise.
Fortunately in the real world where most Accountant and FPs operate, they get on well and work collaboratively for the clients benefit.
Gee, given the level of “expertise” I’ve seen from financial planners regarding SMSF I guess this means I’ll have to fix even more stuff ups due to their interference than I do now. Planners are great at Strategic advice because you don’t have to get too caught up in technical detail. However the administration and delivery of tax advice for a “compliant SMSF” not only requires a strategic plan but also fastidious attention to detail in conjunction with sound technical knowledge. You may have the sales speak to white ant your competitors business but it means didley squat if you can’t back your rhetoric up with actual expertise. Unlike vanilla financial plans that are only scrutinised by the client in a downturn, SMSFs are scrutinised annually by statutory experts who have detail only their mind and who can’t be placated by a “scripted” sales speak response to problems. Any technical deficiencies will not only be found out but will cost the client big time.
agree and have the qualifications to do so
Need to end the us v them attitude with accountants. As Andrea said you just need to have the experience and expertise, provide client education and clear strategic advice and that will drive who clients choose as main adviser.